Xeco 212 Checkpoint: a New House – Readiness

Checkpoint: A New House – Readiness
Leonard Sugue
University of Phoenix
XECO 212 Economic Theory
Audra Sherwood
February 17, 2011

A New House – Readiness
Deciding to buy a house is a lifelong goal for many people. Imagine that you are renting a studio apartment and have just discovered you are having a baby. Your present apartment is small and far from schools and local services. You have decided to move. There are many factors that come into play when making such a large and weighty purchase. Examine the decision-making process from the perspective of an economist. In your Final Project, you use these principles and other factors to make a final decision whether to buy a house.
Purchasing a home for the first time can be overwhelming. A house can be the largest investment someone makes. It can provide advantages, but it can present disadvantages as well. The following principles can be used when deciding to purchase your first home:
 People Face Trade-offs (Mankiw, 2007)
 The Cost of Something Is What You Give Up to Get It (Mankiw, 2007)
When deciding to purchase a home, the principle “People Face Trade-offs” can be applied to help make a final decision. Making decisions requires trading off one goal against another (Mankiw, 2007). The buyer must sacrifice a little to gain a lot. First time home buyers must realize that it takes a lot of money to purchase a home. Buyers must sacrifice things such as vacations, movies, special occasions, and extracurricular activities to save money. Monies are allocated to the down payment, home insurance, taxes, and mortgage. The buyer’s time is also sacrificed when searching for a home and corresponding with the lender. Acknowledging life’s trade-offs is significant because people will make high-quality decisions when they understand the options that they have available (Mankiw, 2007).…...

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...CheckPoint: A New House – Readiness
Principles of Economics XECO/212
Purchasing a first home is the biggest financial decision most people make in their lifetime. There are several factors to consider, and people who make this purchase must thoroughly review the risks and benefits.
When my husband and I chose to buy our first home, we considered three economic principles: the decision-making principle of People Face Trade-Offs, the interaction principle of Trade Can Make Everyone Better Off, and the workings of the economy principle of Prices Rise When the Government Prints Too Much Money.
We knew we would have to give up going out to eat or to the movies as often. Our mortgage payment is higher than our rent payment was, so we had to cut back on non-essentials; this was a trade-off we were willing to make
The interaction and workings of the economy principles created a challenge. Home prices were inflated at that point, because of unethical loan. In this case, trade did make everyone better off, but only on paper. We knew we had to be careful of how we structured our mortgage so we were not in financial danger as the housing market fell. This required a lot of homework to make sure that we could meet these new obligations, and that we did not let our emotions make our decisions.
The marginal benefit to us during the home search was that so many homes were available, and the marginal cost was the difference between our......

...Checkpoint: New House - Readiness
Of the 10 Principles of Economics that would play a major role in a house buying decision, the most outstanding is The Cost of Something Is What You Give Up to Get It. Setting aside the obvious financial sacrifices that are made to buy a home, people also give up the inanimate that is not always easily identified such as the worry about the decision itself, the worry of making the monthly mortgage payment, the worry of upkeep and maintenance, and the worry of resale of the home should it ever be needed. Making sacrifices and foregoing luxuries such as vacations are the animate part of giving up something to get a home. It accompanies the inanimate of stress and worry.
An example of decision making is People Respond to Incentives. Today’s housing market favors the buyer as there are many homes in foreclosure or homes are being sold to avoid foreclosure. This provides an incentive for those who can afford it to buy a home to live in and for those who can afford a second home to rent the home. The rental market is at a premium in many areas as homeowners who are being forced out of the home they tried to own now need to rent.
Trade Can Make Everyone Better Off as an example of interaction is easily explained by expounding on the homeowner’s loss of a home and the subsequent need to rent. By having rental properties available by people who are able to own more than one home creates the scenario where people are better off by trading......

...Week 5 – A New House – Risks & Benefits
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When purchasing a new home there are many things to consider. Reviewing the risks and benefits when thinking about making a life changing purchase of buying a home can help you determine when is the right time for you.
There are multiple government departments that can impact the national fiscal policies but the one that has the potential for the biggest impact is the Federal Reserve. The Federal Reserve is the one that decides if the interest rates increase or decrease based on what the market is doing.
There are multiple policies that can have an influence on the different parts to consider in buying a home, such as, mortgage rates, housing starts, and housing prices. The first thing to look at as a consumer is the lending rates. This rate helps lenders decide if they will borrow money from the Federal Reserve to have money to put into mortgages and housing starts. The higher the interest rates, the higher the cost of buying a home will be. If the interest rates get to be too high, the housing market will become stagnant and cause issues in the economy.
The suggestion that I would give to someone looking at buying a home would be to analyze the risks and benefits of purchasing a home. There are so many considerations to take into account for first time buyers and people looking to refinance. When purchasing a home there are people......

...Checkpoint Week 6
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Money acts as a unit of account. Unit of account is defined as a standard monetary unit of measurement of value/cost of goods, services, or assets. Unit of account is one of the three functions of money. It is the standard denomination that prices are measured with. When I go to work and get paid by the hour, it is me getting paid for the services that I provide. Money is always going to be worth something. The actual value may change but it is always going to be worth something.
Medium of exchange is anything, usually money, which is used to make payments for goods, services, and assets. Medium of exchange (money) is used in trade to avoid going back to the pure barter system. Although usually it is money, it can be anything that people agree to be worth something. For instance, gold and silver are other examples of a medium of exchange. An example of a medium of exchange that I use is my debit and credit cards. They are not actual money but they are used the same.
Money can also be used as a store of value. That is a way to accumulate value until it is needed. A lot of people do this for many different things. Paying a down payment on a house or car is one. Also smaller things like when I go shopping, I like to save up all of my extra money so that I can buy more at one time. Many people don’t like to store their money away. People say why save your money, you are not going to live......

...Checkpoint: A New House – Readiness
This particular project is very close to me, as I am currently pregnant and am working to purchase a house for our family. When reviewing the ten principles of Economics, there are several that play a major role in my decision to purchase a house. First, we as a family needed to understand that there are tradeoffs that will need to be made in order to budget in a house purchase. Frivolous spending such as eating out and purchasing various technological gadgets will have to be monitored more closely and possibly stopped altogether. Also, any old debt would need to be paid off first to make room in the budget for the new debt of the house payments. In order to understand what items are considered frivolous and what old debt is priority, we will need to develop a short and long term budget that addresses where we are currently and where we want to be, and lays out a course of action to meet those goals. Also in the budget and course of action we would need to identify the incentives of purchasing a house, as well as the consequences that can occur. For example, what are the positives of the neighborhood and schools in the area? If one or both of the income providers lost their jobs or became unable to work, what plan of action would take place? These questions and many others would have to be taken into consideration to understand the pros and cons to purchasing a house....

...XECO 212 Week 1 CheckPoint A New House-Readiness
To Buy This material Click below link
http://www.uoptutors.com/XECO-212/ECO-212-Week-1-CheckPoint-A-New-House-Readiness
Deciding to buy a house is a lifelong goal for many people. Imagine that you are renting a studio apartment and have just discovered you are having a baby. Your present apartment is small and far from schools and local services. You have decided to move. There are many factors that come into play when making such a large and weighty purchase. This CheckPoint is designed to have you examine the decision-making process from the perspective of an economist. In your Final Project, you use these principles and other factors to make a final decision whether to buy a house. Resource: Ch. 1 in Principles of Economics
Consider the 10 Principles of Economics as outlined in Ch. 1 of Principles of Economics.
Assume for this CheckPoint that purchasing a new home would be a major decision requiring a substantial financial outlay where the wrong decision would have long-term financial consequences.
Submit a 250- to 300-word response addressing the following points:
Which of the 10 principles do you think plays a major role in your decision?
Provide an example for each about decision making, interaction, and the workings of the economy. Explain how that would influence the marginal benefits and marginal costs associated with the decision to purchase a house with APA Format
For more materials visit: http://www...

...XECO 212 Week 5 CheckPoint A New House-Risks and Benefits
To Buy This material Click below link
http://www.uoptutors.com/XECO-212/XECO-212-Week-5-CheckPoint-A-New-House-Risks-and-Benefits
The government and the fiscal policy it implements play a large role in the housing market. In this CheckPoint, you examine how government policy has consequences for you and the decision to buy a house. This helps you consider situations and alternative decisions in your final project.
Resources: http://www.realtor.org, http://www.nahb.org, http://www.mbaa.org
Assume for this CheckPoint that purchasing a new home would be a major decision requiring a substantial financial outlay where the wrong decision would have long-term financial consequences.
Evaluate the health of the housing market for the next two years by researching forecasts for mortgage rates, housing starts, and housing prices. The following Web sites provide a starting place for your research:
o Mortgage rates: http://www.realtor.org
o Housing starts: http://www.nahb.org
o Housing prices: http://www.mbaa.org
Submit a 250- to 300-word response addressing the following questions:
Which government bodies influence national fiscal policies that would potentially affect the housing market?
o What are some national fiscal policies that can affect mortgage rates, housing starts, and housing prices? Be sure to provide specific examples.
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When buying a new house you have to take into context all of the principles. You have to ask yourself how the market is for a house, how have living standards changed, is the government improving the market, and etc. Everything plays a factor when buying a house. The one principle that I think is very important is number six. I think one should know the market value for a buying a house and how the cost of living works. Most people tend to think buying a house can be easy, and that’s not true. A lot goes into planning for buying a house. In the current economy that we are in, the cost of living is high and finding an affordable house is very hard. The government isn’t exactly making the market any better either. With the unemployment rate the way it is, it’s hard enough trying to find a job let alone buying a house. Without a steady source of income, one can find buying a house a very hard task to do. Next you have to think about if you’re really ready to give up something else to gain the house that you want. Most people don’t always think rationally and that’s bad. In most cases like this with a house a person might set their self back into debt by buying a house. You may be taking money from other places just to satisfy this one need, when you have other pressing matters. It’s like you giving up your car payments to save for the house, essentially your give up on your car to satisfy another need. Most people aren’t ready to do that. Then again a......

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Most people will consider the fourth principle of economics when they buy their home. The fourth principle is people respond to incentives. When you own your own home it will provide you with a tax break when you file your taxes. We bought our house when there was a tax incentive of a 10% of the purchase price. This tax......

...Final Project: A New House-Decision
Anna Schultz
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Chiara Yates
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Many of our decisions are influenced by the state of our economy. Purchase of big ticket items such as appliances, furniture, autos, and a home follow a line of investigation before the decision to purchase is implemented. The purchase of a home is one of the largest investments made in a lifetime, and uses many factoring influences before purchase. This paper will show how economics plays into the decision of the purchase.
One of the first areas to consider is what the trade-off will be in purchasing a home versus the benefit of renting. What we need to consider is if purchasing a home and providing more space, and living closer to shopping and schools, justifies the added cost in utilities and maintenance of a home.
The opportunity costs are another factor to consider. We can vacation closer to home instead of the trip to Europe we had hoped to take. Another option would be to maintain our existing auto instead of buying a new car.
We need to research the marginal costs we would need to pay out. These include the amount of down payment, closing costs, taxes, insurance fees, and moving expenses. If we rent a larger apartment, we won’t have those costs, but we also wouldn’t have the benefit of ownership/write-off of interests in loan and property taxes. Monthly rent costs may be as much for a larger apartment versus a home that......

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My husband and I are looking to buy a bigger house this year or early next year. What we are doing is cutting back on what we are spending on things. So principle 1: People Face Trade-offs. We are not taking a trip this year or spending unnecessary money. We are just spending what we need like food, things like for the baby and the other kids. We have started to take our lunch to work with instead of buying lunch at $10.00 a day. We have been cooking dinner and breakfast almost every day. That saves money to. I’m in school and that is taking up a lot of my extra money, but the payoff is going to be good. Another principle 6: Markets Are Usually a Good Way to Organize Economic Activity. The market economy is an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services. I really like this one Firm decide whom to hire and what to make. Households decide which firms to work for and what to buy with their incomes. These firms and households interact in the marketplace, where prices and self interest guide their decisions. They are saying as a household we decide what we buy and how much we are will to pay. Because if something is too high we want buy it and the companies lost out. But if the prices are right we will buy it all the time. Just like when you buy a house, if the house is too much in this day of age the......

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The apartment that I live in is too small for my baby and me. However many people say this is the best time to buy a house because the interest rates and prices are low. The rent on the apartment that I have is constant going up and up. I believe that in the years to come rental rate will continue to go up. In looking for a house if I can lock into a low fix rate my mortgage will stay the same? In addition, because of the economy banks and owner are passionate about selling their homes therefore this would be a good time for me to purchase a home.
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